As a residential real estate investor who’s decided to manage your own properties, how do you know if you’ve taken on too much? Is it time to consider outside management? Here are some guidelines to figure out whether you’re in the weeds, and whether hiring a residential property management company is the right next step for you.
You’re the Emergency Maintenance Department: The tenants in that “great deal” 16-unit multi-family property are calling your cell phone at two a.m. with plumbing emergencies, and when you arrange for your plumbing subcontractor to be there tomorrow, he doesn’t show. He doesn’t show a second time, either.
You’re the Roving Rent Collector: You’ve got a first-of-the-month due date for rental payments, but only eight of them come in on time, month after month. The remaining tenants try to haggle with you for “just a few more days”, or want to work out payments on this month’s payment, or they don’t call at all, forcing you to spend time trying to track them down. (Oh, and your mortgage payment on the property is due, too.)
Your Time off from Work is Spent at the Courthouse: You have a full-time or other job already, but you have to pursue evictions when your tenants fail to pay rent. You take off time from work so you can spend it waiting around in eviction court for your case to be called—perhaps in addition to having hired an attorney to file the complaint.
What was Supposed to be an Investment has Taken over your Life: You thought you’d invest in rental property to build into an asset over time, but it’s sucking up all of yours. Your tenants have your cell phone number and call you on it at will. They know where you live, and show up there unannounced. And it doesn’t stop when you go on vacation, so you realize you can no longer take them.
The best residential property management companies handle these issues, relieving the owner/investor of the pressures of daily management. They have emergency call and business-hours maintenance call lines, and either in-house maintenance expertise or trusted relationships with specialty subcontractors. They have stringent rental payment policies known by every tenant who signs a lease, a seamless eviction process that doesn’t require your presence, and a collections process that nets results. And much, much more.
Great property management companies do their job well, freeing you to be the investor—and all of the other things you want to be.